Riot Platforms (RIOT 6.15%) – Potential for Steam Exhaustion
The impressive performance of Riot Blockchain this year can be attributed to the soaring valuations in the cryptocurrency market, with Bitcoin’s price surging by more than 150%. Riot has not only captured the upward momentum but has outperformed the market significantly, with its share price rising by a staggering 417%.
The revenue of Riot is directly linked to the price of Bitcoin. In the company’s most recent earnings report for the third quarter, its revenue reached $51.9 million, showing a 12% increase from the previous year. However, despite this growth, Riot still reported a net loss of $45.3 million for the quarter. This reliance on the volatile value of Bitcoin poses a risk for investors. Unless Bitcoin maintains its strong performance in 2024, there is a possibility that Riot Platforms might run out of steam. Investors with low-risk tolerance may be better off avoiding this stock.
C3.ai (AI -2.31%) – AI Potential May Be Fading
As an artificial intelligence (AI) solutions provider, C3.ai has benefited from the AI boom this year. Despite the AI growth experienced by companies like Nvidia, C3.ai has not experienced a significant increase in revenue. Over the past three quarters, its revenue has consistently hovered between $72 million and $73 million, with no substantial quarter-over-quarter growth. The concern arises when C3.ai starts to compare against this year’s figures. Although revenue for the last quarter reached $73.2 million, representing a 17% year-over-year growth, if the growth rate dwindles to single percentage points, it could spell trouble for the stock.
While C3.ai’s shares have increased by more than 180% year-to-date, recent months have seen a decline. Therefore, owning C3.ai might be a risky investment, with the possibility that the stock has already reached its peak.
Tesla (TSLA -0.77%) – Potential Slowdown Despite EV Market Growth
Tesla, a prominent player in the electric vehicle (EV) market, is favored by long-term growth investors. With the EV market gaining traction, Tesla has shown financial improvement, achieving profitability and becoming one of the top companies in the S&P 500.
However, investors need to be prepared for the possibility of a slowdown or even a decline in Tesla’s value next year. The recently launched Cybertruck, for instance, is not expected to be profitable until at least 2025, according to CEO Elon Musk. Additionally, Tesla’s gross margins have been under pressure due to price cuts, declining from 25.1% to 17.9% year-over-year. Musk himself has cautioned that challenging macroeconomic conditions could impact the company’s profitability.
Hence, it is crucial for investors to factor in the potential ramifications of worsening profit numbers and economic headwinds when considering investing in Tesla.